James and Theresa DeMuro owned an engineering company in New Jersey called TAD Associates.
Not unlike yesterday’s tax case from the Eleventh Circuit, TAD Associates withheld money for taxes from its employees paychecks. TAD did not send that money along to the IRS.
The IRS approached the DeMuros about this. It was a civil matter at that point – the IRS required the DeMuros to set up a special trust account where they were to put their employees taxes.